-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KC+P3FFqShtkoBsjfAEDTOQ+GZpI/oOXNabe/4xrbXzQgk0O1sQI/upBzlkJsbNh xcuwjQAHRXC/FrThUxcs6w== 0000101538-97-000018.txt : 19971114 0000101538-97-000018.hdr.sgml : 19971114 ACCESSION NUMBER: 0000101538-97-000018 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED STATES ANTIMONY CORP CENTRAL INDEX KEY: 0000101538 STANDARD INDUSTRIAL CLASSIFICATION: PRIMARY SMELTING & REFINING OF NONFERROUS METALS [3330] IRS NUMBER: 810305822 STATE OF INCORPORATION: MT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-08675 FILM NUMBER: 97714745 BUSINESS ADDRESS: STREET 1: P O BOX 643 CITY: THOMPSON FALLS STATE: MT ZIP: 59873 BUSINESS PHONE: 4068273523 MAIL ADDRESS: STREET 1: PO BOX 643 CITY: THOMPSON FALLS STATE: MT ZIP: 59873-0643 FORMER COMPANY: FORMER CONFORMED NAME: AGAU MINES INC DATE OF NAME CHANGE: 19740728 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (fee required) For the quarterly period ended September 30, 1997 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (no fee required) For the transition period_____ to_____ UNITED STATES ANTIMONY CORPORATION (Name of small business issuer in its charter) Montana (State or other jurisdiction of incorporation or organization) 81-0305822 (I.R.S. Employer Identification No.) P.O. Box 643, Thompson Falls, Montana 59873 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (406) 827-3523 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X No ----- ----- At November 10, 1997, the registrant had outstanding 13,065,434 shares of par value $.01 common stock. PART 1. FINANCIAL INFORMATION ITEM 1. Financial Statements and Supplementary Data United States Antimony Corporation and Subsidiary Consolidated Balance Sheets (Unaudited) September 30, December 31, 1997 1996 Current assets: Restricted cash $35,078 Accounts Receivable 1,000 $33,837 Inventories 564,752 556,249 Prepaid expenses 10,937 21,085 Total current assets 611,767 611,171 ------- ------- Properties, plants and equipment, net 640,469 670,081 Restricted cash, reclamation bonds 178,486 170,046 ------- ------- Total assets $1,430,722 $1,451,298 ========== ========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Checks issued and outstanding $33,416 $29,491 Reserve for production costs 43,000 Accounts payable 122,029 306,636 Accrued payroll and property taxes 83,944 93,454 Accrued payroll and other 37,517 39,823 Judgments payable 142,924 131,764 Accrued interest payable 882,887 792,240 Payable to related parties 608,630 644,752 Notes payable to bank, current 178,205 125,397 Note payable to Bobby C. Hamilton, current 21,648 20,494 Debentures payable 650,000 650,000 Accrued reclamation costs, current 100,000 100,000 ------- ------- Total current liabilities 2,904,200 2,934,051 --------- --------- Notes payable to bank, noncurrent 118,556 185,607 Note payable to Bobby C. Hamilton, noncurrent 1,646,566 1,706,257 Accrued reclamation costs, noncurrent 254,311 215,212 --------- ---------- Total liabilities $4,923,633 $5,141,127 ---------- ----------
Commitments and contingencies See Notes to Consolidated Financial Statements ITEM 1. Financial Statements and Supplementary Data, Continued United States Antimony Corporation and Subsidiary Consolidated Balance Sheets (Unaudited) September 30, December 31, 1997 1996 Stockholders' deficit: Preferred stock, $.01 par value, 10,000,000 shares authorized: Series A: 4,500 shares issued and outstanding $45 $45 Series B: 750,000 shares issued and outstanding 7,500 7,500 Common stock, $.01 par value, 20,000,000 shares authorized; 13,065,434 and 12,627,434 shares issued and outstanding 130,654 126,274 Additional paid-in capital 13,537,147 13,326,464 Accumulated deficit (17,168,257) (17,150,112) Total stockholders' deficit (3,492,911) (3,689,829) ------------ ------------ Total liabilities and stockholders' deficit $1,430,722 $1,451,298 ============ ============
See Notes to Consolidated Financial Statements United States Antimony Corporation and Subsidiary Consolidated Statements of Operations for the three and nine-month periods ended September 30, 1997 and September 30, 1996
Unaudited Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 Revenues: Sales of antimony products $1,083,361 $1,101,688 $3,386,667 $3,420,520 Sales of gold and silver 234,034 666,685 --------- ---------- ---------- ---------- Total Revenues 1,083,361 1,335,722 3,386,667 4,087,205 --------- ---------- ---------- ---------- Cost of Production: Cost of antimony production 801,041 1,040,662 2,737,414 3,013,025 Cost of gold and silver production 285,308 935,048 --------- ---------- --------- ---------- Total Cost of Production 801,041 1,325,970 2,737,414 3,948,073 --------- ---------- --------- ---------- Gross Profit 282,320 9,752 649,253 139,132 --------- ---------- --------- ---------- Other operating expenses: Care and maintenance Yellow Jacket 48,336 157,949 Exploration and evaluation 44,961 123,253 General and administrative 77,621 74,277 223,789 251,944 ------- ------ ------- ------- 170,918 74,277 504,991 251,944 ------- ------ ------- ------- Other expenses (income): Gain on disposal of asset (45,000) Gain from accounts payable adjustment (37,386) Interest expense 79,251 57,504 227,980 197,451 Interest income (1,520) (2,725) (10,238) (7,175) Other (17,949) (17,949) 59,782 54,779 162,407 145,276 --------- -------- ---------- --------- Net income (loss) $51,620 $(119,304) $(18,145) $(258,088) ======== ========= ======== ======== Net Income (loss) per share Nil $(.01) Nil $(.03) ======== ========= ======== ======== Weighted average common shares outstanding 13,065,434 12,543,399 12,952,997 12,281,496
See Notes to Consolidated Financial Statements United States Antimony Corporation and Subsidiary Consolidated Statement of Cash Flows for the three and nine-month periods ended September 30, 1997 and September 30,1996
Unaudited September 30, September 30, 1997 1996 Cash flows from operating activities: Net loss $(18,145) $(258,088) Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 122,331 155,626 Gain on disposal of equipment (45,000) Issuance of common stock to directors as compensation 5,063 Gain on adjustment to accounts payable (37,386) Reservation for production costs 43,000 Change in: Restricted cash (43,518) 4,598 Accounts receivable 32,837 39,038 Inventories (8,503) (109,788) Prepaid expenses 10,148 (6,578) Accounts payable (184,607) 7,973 Accrued payroll and property taxes (9,510) (25,884) Accrued payroll and other (2,306) (5,178) Judgments payable 11,160 (11,214) Accrued interest payable 90,647 80,160 Payable to related parties (36,122) 2,319 Accrued reclamation costs (60,901) (70,607) --------- --------- Net cash used in operating activities (48,426) (242,623) --------- --------- Cash flows from investing activities: Purchase of properties, plant and equipment (92,719) (116,012) Sale of property 45,000 --------- --------- Net cash used in investing activities (92,719) (71,012) --------- --------- Cash flows from financing activities: Payments on notes payable to bank (net) (58,057) (51,289) Proceeds from note payable to bank, current 43,814 Proceeds from long-term bank debt 238,297 Payments to Bobby C. Hamilton (58,537) (49,922) Proceeds from sale of common stock 210,000 127,560 Advances from bank overdraft 3,925 43,189 --------- --------- Net cash provided by financing activities 141,145 307,835 --------- --------- Net decrease in cash -0- (5,800) Cash, beginning of period -0- 5,800 --------- --------- Cash, end of period $ -0- $ -0- ========= ========= Supplemental disclosures: Cash paid during the nine-month period for interest $137,333 $117,291 -------- --------
See Notes to Consolidated Financial Statements PART I - FINANCIAL INFORMATION (Continued) UNITED STATES ANTIMONY CORPORATION and SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Notes to December 31, 1996 consolidated financial statements: The notes to the consolidated financial statements as of December 31, 1996, as set forth in the Company's 1996 Annual Report on Form 10-KSB, substantially apply to these interim consolidated financial statements and are not repeated here. 2. Adjustments to financial statements: The financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods reported. All such adjustments are of a normal recurring nature. All financial statements presented herein are unaudited. However, the balance sheet as of December 31, 1996, was derived from the audited consolidated balance sheet referred to in Note 1 above. 3. Commitments and contingencies Until 1989, the Company mined, milled and leached gold and silver in the Yankee Fork Mining District in Custer County, Idaho. The metals were recovered by a 150-ton per day gravity and flotation mill, and the concentrates were leached with cyanide to produce a bullion product at the Preachers Cove mill, which is located nine miles north of Sunbeam, Idaho on the Yankee Fork of the Salmon River. In 1994, the U.S. Forest Service, under the provisions of the Comprehensive Environmental Response Liability Act of 1980 (CERCLA), designated the cyanide leach plant as a contaminated site requiring cleanup of the cyanide solution. In 1996, the Company signed a consent decree with the Idaho Department of Environmental Quality relating to completing the reclamation and remediation at the Preachers Cove mill. The Company anticipates having the cleanup complete sometime in 1998. On November 15, 1996, the Bureau of Land Management (BLM) notified the Company that it may be a responsible party as defined under CERCLA for hazardous substance release from uncontained mining tailings at a mining site near Pine Creek, Idaho. The Company was one of 13 companies that had received a similar notice. In response to the notification the Company informed the BLM that it is neither a current or former owner of a site, has never been an operator, nor has it shipped hazardous substances or arranged for the disposal or treatment of hazardous substances in the Pine Creek area. Accordingly, the Company does not consider itself a potentially responsible party under CERCLA for the Pine Creek site. On August 21, 1997, the Company received correspondence from the United States Environmental Protection Agency, Region 10, informing the Company that it will not recommend that the Company be added to the litigation involving contamination at the Pine Creek site. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition General Section 21E of the Securities Exchange Act of 1934 provides a "Safe Harbor" for forward-looking statements. Certain information included herein contains statements regarding management's expectations about future production and development activities as well as other capital spending, financing sources and effects of regulation. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include, but are not limited to, those relating to the market price of metals, production rates, production costs, availability of continued financing, and the Company's ability to remain a going concern. The Company cautions readers not to place undue reliance on any forward-looking statements, and such statements speak only as of the date made. The Company's business is subject to various risk factors, some of which are discussed in the Company's report on Form 10KSB for the year ended December 31, 1996, in "Item 1. Description of Business" and in Notes to Consolidated Financial Statements, "2. Concentration of Risk:" Results of Operations, comparison of the nine and three-month periods ended September 30, 1997 and September 30, 1996 The Company's operations resulted in a net loss of $18,145 for the nine-month period and net income of $51,620 for the three-month period ended September 30, 1997, compared to net losses of $258,088 and $119,304 for the same respective periods in 1996. The increase in income is primarily due to increased gross profit in the antimony division and decreased general and administrative expenses. Total revenues for the first nine months of 1997 were $3,386,667 compared with $4,087,205 for the comparable period in 1996, a decrease of $700,538. Total revenues during the third quarter of 1997 were $1,083,361 compared with $1,335,722 during the third quarter of 1996, a decrease of $252,361. The decrease in revenues during 1997 compared to 1996 was due to the absence of gold sales in 1997. Sales of antimony products during the first nine months of 1997 were $3,386,667 consisting of 2,346,336 pounds at an average sale price of $1.44 per pound. During the third quarter of 1997 sales of antimony products were $1,083,361 consisting of 774,829 pounds at an average sale price of $1.40 per pound. Sales of antimony products during the first nine months of 1996 were $3,420,520 consisting of 1,802,402 pounds at an average sale price of $1.90 per pound. During the third quarter of 1996 sales of antimony products were $1,101,688 consisting of 678,340 pounds at an average sale price of $1.62 per pound. The decrease in sale prices of antimony products from the comparable nine and three month periods in 1996 to those of 1997 is the result of a corresponding decrease in antimony metal prices. Gross profit from antimony sales during the first nine months of 1997 was $649,253, and $282,320 during the third quarter of 1997, compared with gross profit of $407,495 during the first nine months of 1996 and $61,026 during the third quarter of 1996. The increases in gross profit for the nine and three month periods ended September 30, 1997, compared to the same periods of 1996 are principally due to lower costs of antimony metal and increasing sales of antimony products with greater gross margins. The Company reports 50% of total antimony sales made by HoltraChem and the Company. Accordingly, total sales of antimony products by both companies was $6,773,334 or 4,693,463 pounds during the first nine months of 1997 and 1,549,657 pounds during the third quarter of 1997. Substantially all of the antimony products sold were produced at the Company's plant in Thompson Falls, Montana. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (Continued): Sales of gold and silver totaled $666,685 during the first nine months of 1996 and $234,034 during the third quarter of 1996. Ounces of gold sold during the nine and three month periods ended September 30, 1996, were 1,726 and 631, respectively. Gross losses from the gold division were $268,363 and $51,274 for the nine and three month periods ended September 30, 1996, respectively. In August of 1996 the Company discontinued mining operations at Yellow Jacket due to recurring operating losses, and placed the property on a care and maintenance basis. Concurrently, the Company began an underground exploration program in an effort to discover mineralized material that could be economically mined and processed. Costs related to the care and maintenance of Yellow Jacket were $157,949 and $48,336 for the nine and three month periods ended September 30, 1997, respectively. Costs related to exploration and evaluation were $123,253 and $44,961 for the nine and three month periods ended September 30, 1997, respectively. General and administrative expenses decreased $28,155 during the first nine months of 1997 compared to the first nine months of 1996. The decrease in general and administrative costs n 1996 compared to 1997 was principally due to legal fees relating to the Company's USAMSA negotiations and increased professional and accounting fees related to the Company's annual audit of it's financial statements and efforts to regain compliance with the Securities and Exchange Commission incurred in 1996. During the first nine months of 1996 the Company recognized a gain on the disposal of property of $45,000. There were no gains or losses on disposition of assets for the comparable period in 1997. Interest expense was $227,980 and $79,251 for the nine and three month periods ended September 30, 1997, respectively, compared to $197,451 and $57,504 for the same periods in 1997. The increase was due to a increased borrowings from a bank in 1997. Interest income was $10,238 and $1,520 for the nine and three month periods ended September 30, 1997, respectively, compared to $7,175 and $2,725 for the same periods in 1996. The increase in interest income was attributable to a corresponding increase in restricted cash held for reclamation purposes and restricted cash held for USAMSA development. During the nine month period ended September 30, 1997 the Company realized a gain from an accounts payable adjustment of $37,386, there was no such gain during the comparable period of 1996. In addition, the Company realized other income of $17,949 during the three and nine month periods ended September 30, 1997. The other income was principally composed of proceeds from the sale of residual gold contained in carbon from the Preachers Cove mill, there were no similar sources of other income during the comparable periods of 1996. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (Continued): Financial Condition and Liquidity At September 30, 1997, Company assets totaled $1,430,722, and there was a stockholders' deficit of $3,492,911. The accumulated deficit increased $18,145 from December 31, 1996 due to the net loss recognized from the Company's operations during the first nine months of 1997. In order to continue as a going concern, the Company is dependent upon (1) the planned conversion of certain debt and accrued interest to equity (2) profitable operations from the antimony division, (3) additional equity financing, and (4) continued availability of bank financing. Without such debt conversions and additional financing, the Company may not be able to meet its obligations, fund operations and continue in existence. There can be no assurance that management will be successful in its plans to improve the financial condition of the Company. Cash consumed by operating activities during the first nine months of 1997 was $48,426 compared to $242,623 during the same period in 1996. The decrease related primarily to decreased operating losses during 1997 as compared to the same period in 1996. Investing activities consumed $92,719 during the first nine months of 1997 and resulted from the Company's investment in domestic and Mexican (USAMSA) antimony processing equipment and buildings. Cash provided by investing activities during the nine months ended September 30, 1996, consisted of $45,000 from the disposal of property. Purchases of property plant and equipment in the antimony division consumed $116,012 of cash during the first nine months of 1996. Proceeds of $210,000 were generated through stock sales during the first nine months of 1997 compared with $127,560 from sales of common stock during the comparable period of 1996. Borrowings of $238,297 pursuant to a five-year note payable provided additional cash during the third quarter of 1996, similar short term borrowings from a bank provided $43,814 during the third quarter of 1997. Cash used by financing activities totaled $116,594 during the first nine months of 1997 compared with $101,211 during the comparable period of 1996. In both periods cash used by financing activities consisted of payments on notes to a bank and Bobby C. Hamilton. Advances in the form of bank overdrafts was $3,925 during the first nine months of 1997 and $43,189 during the nine-month period ended September 30, 1996. Significant financial commitments for future periods will include: Providing $5,000 per month for a "sinking fund" to pay defaulted debentures and accrued interest, which are not ultimately converted. Servicing borrowings from the bank. Servicing the Hamilton note payable at a minimum of $150,000 annually. Keeping current on payroll tax liabilities and accounts payable. Fulfilling its responsibilities with environmental regulatory and financial reporting agencies. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (Continued): Annual care and maintenance costs at the Yellow Jacket mine. Minimum annual royalty payments of $52,500 to Geosearch and Yellow Jacket mines. Providing antimony profits to fund its antimony inventory. The Company plans to address these and other financial requirements by enhancing the value of its gold properties through an exploration program begun in 1996. The Company hopes to develop additional reserves from exploration and generate funds from the sale, joint venture or eventual production from the property. In 1997, $210,000 was generated through sales of shares of unregistered common stock to existing stockholders, directors, and others to help finance operations and develop the Company's interests in USAMSA. In the fourth quarter of 1996, the Company sought and obtained sponsorship to list the Company's stock on NASD's Electronic Bulletin Board trading exchange. While the Company has yet to sign a definitive agreement relating to its investment in USAMSA, it continues to expend cash in the development of Mexican antimony operations. The Company hopes that additional financial resources will be available from these operations once the finalization of the Company's interest is complete and antimony production from USAMSA begins. On October 3rd, 1997, the Company held its first annual shareholders' meeting since 1989. During this meeting the Company's directors were elected to serve for another annual term and a proposal to convert certain director and debenture holder debt into convertible Series C Preferred Stock was approved. The Company's managementintends to proceed with the proposal to debt holders to convert their debts into Series C Preferred Stock and improve the financial position of the Company. PART I I - OTHER INFORMATION Items 1, 2, 3, 4, and 5 are omitted from this report as inapplicable. ITEM 6. Exhibits and Reports on Form 8-K Exhibit No. Item Dated 10.27 Letter from Environmental August 21, 1997 Protection Agency, Region 10 SIGNATURES Pursuant to the requirements of Section 13 or 15(b) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. UNITED STATES ANTIMONY CORPORATION (Registrant) By:/s/ John C. Lawrence Date: November 12, 1997 John C. Lawrence, Director and President (Principal Executive, Financial and Accounting Officer) EX-10.27 2 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 10 1200 Sixth Avenue Seattle, Washington 98101 August 21, 1997 In Reply Refer to: ORC-158 John C. Lawrence for United States Antimony Corp. 1250 Prospect Creek Road Thompson Falls, Montana 59873 Dear Mr. Lawrence: Earlier this summer, the U.S. Environmental Protection Agency sent you a request for information pursuant to its authority under Section 104(e) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980,42 U.S.C. 9604(e). EPA sent similar requests to a number of companies associated with mining activities in the Coeur d'Alene River Basin. We needed this information in order to identify parties who contributed substantially to environmental contamination in the Coeur d'Alene River Basin. Parties who have contributed substantially to this contamination may be added to litigation originally filed on March 22, 1996, U.S. v. ASARCO, et al., No. 96-0122-N-EJL. After reviewing the information contained in your response and provided by other sources, EPA has determined that it will not recommend adding United States Antimony Corp. to this litigation. In providing this notice, EPA reserves its right to take separate actions if such action is later warranted. For now, however, we wanted to advise you of our determination based on available information. Your efforts, and those of the others responding to the information requests, have helped the EPA make fair decisions in this massive undertaking to ensure the future protection of human health and the environment in the Coeur d'Alene River Basin. If you have any questions concerning this letter or related issues, please call Tom Swegle of the Department of Justice at (202) 514-3143. Sincerely, By:/s/Charles E. Findley Date:August 21, 1997 Charles E. Findley Deputy Regional Administrator EX-27 3
5 9-MOS DEC-31-1997 SEP-30-1997 35078 0 1000 0 564752 611767 3138193 2497724 1430722 2904200 0 0 7545 130654 (3631110) 1430722 3386667 3386667 2737414 2737414 667398 0 227980 (18145) 0 (18145) 0 0 0 (18145) 0 0
-----END PRIVACY-ENHANCED MESSAGE-----